[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR155.3]

[Page 567-568]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 155_TRADING STANDARDS--Table of Contents
 
Sec.  155.3  Trading standards for futures commission merchants.

    (a) Each futures commission merchant shall, at a minimum, establish 
and enforce internal rules, procedures and controls to:
    (1) Insure, to the extent possible, that each order received from a 
customer or from an option customer which is executable at or near the 
market price is transmitted to the floor of the appropriate contract 
market before any order in any future or in any commodity option in the 
same commodity for any proprietary account, any other account in whch an 
affiliated person has an interest, or any account for which an 
affiliated person may originate orders without the prior specific 
consent of the account owner, if the affiliated person has gained 
knowledge of the customer's or option customer's order prior to the 
transmission to the floor of the appropriate contract market of the 
order for a proprietary account, an account in which the affiliated 
person has an interest, or an account in which the affiliated person may 
originate orders without the prior specific consent of the account 
owner; and

[[Page 568]]

    (2) Prevent affiliated persons from placing orders, directly or 
indirectly, with another futures commission merchant in a manner 
designed to circumvent the provisions of paragraph (a)(1) of this 
section.
    (b) No futures commission merchant or any of its affiliated persons 
shall:
    (1) Disclose that an order of another person is being held by the 
futures commission merchant or any of its affiliated persons, unless 
such disclosure is necessary to the effective execution of such order or 
is made at the request of an authorized representative of the 
Commission, the contract market on which such order is to be executed, 
or a futures association registered with the Commission pursuant to 
section 17 of the Act; or
    (2)(i) Knowingly take, directly or indirectly, the other side of any 
order of another person revealed to the futures commission merchant or 
any of its affiliated persons by reason of their relationship to such 
other person, except with such other person's prior consent and in 
conformity with contract market rules approved by or certified to the 
Commission.
    (ii) In the case of a customer who does not qualify as an 
``institutional customer'' as defined in Sec.  1.3(g) of this chapter, a 
futures commission merchant must obtain the customer's prior consent 
through a signed acknowledgment, which may be accomplished in accordance 
with Sec.  1.55(d) of this chapter.
    (c) No futures commission merchant shall knowingly handle the 
account of any affiliated person of another futures commission merchant 
or of an introducing broker unless the futures commission merchant:
    (1) Receives written authorization from a person designated by such 
other futures commission merchant or introducing broker with 
responsibility for the surveillance over such account pursuant to 
paragraph (a)(2) of this section or Sec.  155.4 (a)(2), respectively;
    (2) Prepares immediately upon receipt of an order for such account a 
written record of such order, including the account identification and 
order number, and records thereon, by time-stamp or other timing device, 
the date and time, to the nearest minute, the order is received; and
    (3) Transmits on a regular basis to such other futures commission 
merchant or introducing broker copies of all statements for such account 
and of all written records prepared upon the receipt of orders for such 
account pursuant to paragraph (c)(2) of this section.
    (d) No affiliated person of a futures commission merchant shall have 
an account, directly or indirectly, with another futures commission 
merchant unless:
    (1) Such affiliated person receives written authorization to 
maintain such an account from a person designated by the futures 
commission merchant with which such person is affiliated with 
responsibility for the surveillance over such account pursuant to 
paragraph (a)(2) of this section; and
    (2) Copies of all statements for such account and of all written 
records prepared by such other futures commission merchant upon receipt 
of orders for such account pursuant to paragraph (c)(2) of this section 
are transmitted on a regular basis to the future commission merchant 
with which such person is affiliated.

(Approved by the Office of Management and Budget under control numbers 
3038-0007 and 3038-0022)

(Secs. 2(a)(1), 4c(a)-(d), 4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, 
Commodity Exchange Act (7 U.S.C. 2, 4, 6c(a)-(d), 6f, 6g, 6k, 6m, 6n, 
12a, 19 and 21; 5 U.S.C. 552 and 552b))

[41 FR 56142, Dec. 23, 1976, as amended at 44 FR 71821, Dec. 12, 1979; 
46 FR 54535, Nov. 3, 1981; 46 FR 63036, Dec. 30, 1981; 47 FR 57020, Dec. 
22, 1982; 48 FR 35304, Aug. 3, 1983; 66 FR 53523, Oct. 23, 2001; 70 FR 
5924, Feb. 4, 2005]